Sunday, June 26, 2022
 
Columnist
Martin Hennecke

Congo lithium site sparks Oz battle with Zijin
 
23/05/2022
 
<p>Australia&#39;s AVZ Minerals is battling to retain control of what is potentially the world&#39;s largest untapped lithium deposit amid ownership claims from Chinese investors including Zijin Mining (2899), says Boatman Capital.</p><p>AVZ&#39;s interest in the Manono lithium project could fall to 36 percent from 75 percent, London-based short-seller Boatman said in a research report. That may follow its planned sale of a 24 percent stake this month and a flurry of lawsuits from companies, including Zijin, claiming ownership, documents published by Boatman show.</p><p>AVZ said earlier this month it was a matter of days from securing its mining permit for the Manono lithium project in the Democratic Republic of Congo. A week later, it announced that Zijin&#39;s Jin Cheng Mining had requested arbitration at the International Chamber of Commerce in Paris to claim a 15 percent share of the mining project that it says it acquired from state-owned miner Cominiere last year.</p><p>Boatman published a contract that showed Jin Cheng agreed to pay US$33.4 million (HK$262 million) to Cominiere for the stake.</p><p>Zijin said in a May 9 statement that it had followed the law and complied with the joint venture agreement for the Manono project. &quot;Zijin Mining will actively protect its legitimate rights and interests, and continue to address future issues through litigation and arbitration,&quot; it said.</p><p>AVZ said the agreement is meritless because it has the right to preempt any share sale by Cominiere, which holds 25 percent of the project. The company says it is in advanced discussions with the government to acquire the 15 percent itself.</p><p>&quot;At best, AVZ faces months or years of legal fights&quot; to block a claim by a Zijin subsidiary, Boatman said in the report. &quot;At worst, AVZ will lose control of Manono.&quot;</p><p>AVZ is already set to sell a 24 percent stake in the project to Chinese battery maker Suzhou Cath Energy Technologies at the end of this month for a US$240 million investment. That&#39;s about five times the value per share in the Cominiere-Jin Cheng agreement.</p>

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